In the last few years, the major cruise lines have been trying to enforce arbitration provisions which they inserted into the crew member’s employment agreements.
Many of our crew clients around the world ask us "what is arbitration?" and was is the difference between an "arbitration" and a "trial."
Arbitration is a process where disputes between parties are decided by an "arbitrator" or a panel of "arbitrators." In the crew cases we have arbitrated, the process is started by filing a claim with the American Arbitration Association / International Centre for Dispute Resolution. This is the administrative body, typically called AAA or the ICDR, which oversees the process.
The biggest difference between arbitration and a trial, is that a trial takes place before a judge and a jury. There is no judge or jury in arbitration.
Arbitrators are typically other attorneys or retired judges who are selected by counsel for the parties. When there are three panel arbitrators, counsel for the crewmember will select one arbitrator and counsel for the cruise line will select one arbitrator. Those two selected arbitrators will select a third arbitrator. The arbitrators are sworn to be fair and impartial.
Once the arbitrator or arbitrators are selected, a date for the arbitration hearing will be selected. Unlike a jury trial which could easily last more than a week, an arbitration hearing may last just two days. There are relaxed rules of evidence. The arbitrators will typically receive into evidence hearsay medical reports and affidavits of witnesses without the other side being permitted an opportunity to conduct cross examination.
Pre-hearing discovery is limited. There is no requirement to conduct discovery, although in most cases the crewmember will give a deposition and appear for a medical evaluation by a doctor selected by the cruise line defense lawyer. We will always have our crew clients examined by a doctor who will appear live at the arbitration hearing, and we will take a deposition of a representative of the cruise line.
The cruise lines are responsible for the filing fee and the fees of the arbitrators. These costs and fees can be expensive. A cruise line paid around $60,000 in the ICDR filing fee and the fees of three arbitrators in a recent case. Obviously, no crewmember could afford to arbitrate if they were responsible for these fees.
There is the issue of where the arbitration hearing will take place. Many arbitration agreement stipulate that the hearings will take place in the country where the cruise ship is flagged or the country of the crewmember’s citizenship of the crewmember. In many cases, the cruise line will nonetheless agree to arbitrate in Miami, because it is too expensive to pay the fees and costs associated with flying Miami based arbitrators and defense lawyers to far away places like India. Quite frankly, I would love to arbitrate cases in India, Romania, Serbia, and throughout the Caribbean islands.
Another big difference between arbitration and a trial is that the entire arbitration procedure, from start to finish, should take less than one year. Given the congestion of our court docket in the state court system here in Miami, a date for jury trial could take two years or more. This is good news for injured crewmembers who have no income and are in need of resolving their cases in an efficient manner.
Once the arbitration award is decided, it is not appealable except under very rare circumstances. This is good news because the cruise lines can’t drag out an appeal for another year.
It is generally thought that a down side of the arbitration proceeding is that the amount of the arbitration awards are generally considered to be less than what a jury might otherwise award. But the range of arbitration awards in my experience and to my knowledge have not been unreasonably low.
Of the six or so arbitration awards I am familiar with regarding crewmembers with injured backs for example, there was a low award of around $75,000, several in the $300,000 to $400,000 range, one for $800,000, and the high award of $1,250,000 which our firm handled this year.
If you are a crewmember injured on a cruise ship, don’t hesitate to contact our office for a free consultation to discuss your rights.